Pretty much. You're going to have to deal with trade offs and be flexible depending on where you want your widget to be embeddable. You've got more control if you hand out js code (think adsense), but a lot more sites are going to accept your code if you hand out the html for a flash object (think youtube). You should be open to multiple versions.
You might take a look at a widget directory service like widgetbox (http://www.widgetbox.com/ ). They try and take care of some of this, but if you use them or not you're still going to want to know what works where and why.
Get ready to sign up for lots of accounts and test your widget everywhere.
